Well, the current log market is a good news/bad news scenario. The good news is that we see excellent prices resulting from high demand for cedar and pulp logs,but, on the other side of the coin, ponderosa pine prices still lag behind historical markets and the future doesn’t look much brighter. Between these two extremes is the market for other species, which has dropped from last spring.
Let’s take a brief look at what’s driving the markets at each end of the spectrum.
If you’ve been watching the cedar log market, you’re aware that prices are at all-time highs. The prices have been driven by many factors but primarily a shortage of logs and, consequently, lumber. This log/lumber shortage is prevalent throughout the western region, including Canada, and is coupled with a solid demand for cedar products, such as decking and fencing.
Though prices are currently high, ironically, the summer project season may bring a note of uncertainty. Analysts fear that consumers will find substitute products or delay building projects once they experience the “sticker shock” of higher priced cedar products.
Prices for this product are the highest they’ve been in about 11 years. In fact, today’s prices are about twice what they were a year ago! Additionally, extra log yards have been established and more purchasers are buying pulp.
The booming pulp market resulted from a shortage of chips. As sawmills curtailed operations in the generally weak lumber market, chips, a byproduct of sawmilling, became scarce.
There are varying opinions regarding the duration of this hot pulp market. Most pulp purchasers believe prices will hold in the short term, but are likely to fall once more logs start moving later this year.
Since log size greatly impacts ponderosa pine value, accurately describing this log market is a real challenge. If you have big ponderosa pine, log prices allow for good money to be made; but making money from small to moderate- sized ponderosa pine logs is a tough proposition.
The ponderosa pine log market has softened over the years due to lower lumber prices and the fact that fewer sawmills in our region are cutting pine. Lumber prices also have been negatively impacted by substitute products used in place of pine (vinyl windows, for example), and cheaper, readily available pine from overseas and southeastern U.S. markets. Unfortunately, it appears likely that the ponderosa pine market will continue to hover in the lower price range, especially for smaller logs.